What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 496 added, 453 removed, 136 unchanged (87% of the section changed)

FINANCIAL STATEMENTS.

ASSET ENTITIES INC.

UNAUDITED FINANCIAL STATEMENTS

Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023

Statements of Operations

Statements of Changes in Stockholder’s Equity

Statements of Cash Flows

Notes to Financial Statements

ASSET ENTITIES INC.

Condensed Balance Sheets

ENTITIES INC.

FINANCIAL STATEMENTS

Sheets as of September 30, 2024 (unaudited) and December 31, 2023

of Operations

of Changes in Stockholder’s Equity

of Cash Flows

to Financial Statements

ENTITIES INC.

Balance Sheets

September 30,

Current Assets

23 unchanged sentences

$ 0.0001 par value, 38,000,000 authorized 2,225,889 and 1,207,827 shares issued, respectively

Additional paid in capital

Treasury Stock, at cost:

Class B Common Stock - 50,000 shares

Additional paid in capital

Accumulated deficit

4 unchanged sentences

STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Condensed Statements

of Operations

accompanying notes are an integral part of these unaudited condensed financial statements.

ENTITIES INC.

Statements of Operations

Three Months Ended

Six months ended

Nine months ended

September 30,

Operating expenses

12 unchanged sentences

$ ( 3,582,799 )

Dividend on Series B Preferred Stock

Net loss attributable to common stockholders

$ ( 1,323,135 )

$ ( 1,190,491 )

$ ( 4,436,576 )

$ ( 3,582,799 )

Loss per share of common stock - basic and diluted

Weighted average number of shares of common stock outstanding - basic and diluted

The accompanying notes are an integral part

of these unaudited condensed financial statements.

Weighted average number

of shares of common stock outstanding - basic and diluted

accompanying notes are an integral part of these unaudited condensed financial statements.

ENTITIES INC.

Condensed Statement

of Stockholders’ Equity

For the three and six months ended June 30,

2024 and 2023

A Convertible

Statement of Stockholders’ Equity

the nine months ended September 30, 2024

Series A Convertible

Preferred Stock

- December 31, 2023

Balance - December 31, 2023

$ ( 176,876 )

$ ( 5,558,315 )

from Class A to Class B common stock

Based Compensation

Conversion from Class A to Class B common stock

Stock based compensation

( 1,386,904 )

- March 31, 2024

Balance - March 31, 2024

$ ( 176,876 )

$ ( 6,945,219 )

A Convertible Preferred stock issued

B common stock subscription proceeds received, net

B Common stock issued for restricted stock awards

B Common stock issued for purchase of intangible asset

Series A Convertible Preferred stock issued

Class B common stock subscription proceeds received, net

Class B Common stock issued for restricted stock awards

Class B Common stock issued for purchase of intangible

( 1,726,537 )

- June 30, 2024

Balance - June 30, 2024

$ ( 176,876 )

$ ( 8,671,756 )

ASSET ENTITIES INC.

Condensed Statement

of Stockholders’ Equity

For the three and six months ended June 30,

2024 and 2023

A Convertible

Series A Convertible Preferred stock issued

Class B Common stock issued for conversion of Series A

Convertible Preferred stock

Conversion from Class A to Class B common stock

Cancellation of Class B common stock

Stock based compensation

Reverse stock split adjustment

Dividend declared - Series A Convertible Preferred stock

( 1,315,369 )

Balance - September 30, 2024

$ ( 176,876 )

$ ( 9,994,891 )

accompanying notes are an integral part of these unaudited condensed financial statements.

ENTITIES INC.

Statement of Stockholders’ Equity

the nine months ended September 30, 2023

Preferred Stock

- December 31, 2022

Balance - December 31, 2022

$ ( 627,118 )

B common stock and warrant issued

B Common stock issued for restricted stock awards

Class B common stock and warrant issued

Class B Common stock issued for restricted stock awards

( 1,071,251 )

- March 31, 2023

Balance - March 31, 2023

$ ( 1,698,369 )

B Common stock issued for restricted stock awards

Class B Common stock issued for restricted stock awards

( 1,321,057 )

- June 30, 2023

Balance - June 30, 2023

$ ( 3,019,426 )

The accompanying notes are an integral part

of these unaudited condensed financial statements.

ASSET ENTITIES INC.

Condensed Statements of Cash Flows

Six months ended

Rounding adjustment

Class B Common stock issued for restricted stock awards

( 1,190,491 )

Balance - September 30, 2023

$ ( 4,209,917 )

accompanying notes are an integral part of these unaudited condensed financial statements.

ENTITIES INC.

Statements of Cash Flows

Nine months ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

22 unchanged sentences

Cash at end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for income taxes

Cash paid for interest

NON CASH INVESTING AND FINANCING ACTIVITIES

Conversion from Class A to Class B common stock

Conversion from Series A Convertible Preferred stock to Class

B common stock

Class B Common stock issued for purchase of intangible asset

The accompanying notes are an integral part

of these unaudited condensed financial statements.

Cancellation of Class B common stock

Reverse stock split adjustment

accompanying notes are an integral part of these unaudited condensed financial statements.

ENTITIES INC.

NOTES TO CONDENSED

FINANCIAL STATEMENTS

As of and for the

six months ended June 30, 2024

Organization, Description of

Business and Liquidity

Asset Entities Inc.

(“Asset Entities”,

“we”, “us” or the “Company”), began operations as a general partnership in August 2020 and formed

Assets Entities Limited Liability Company in the state of California on October 20, 2020.

The interim financial statements reflect the

operations of the Company from inception of the general partnership.

On March 15, 2022, the Company filed Articles of Merger to register

and incorporate with the state of Nevada and changed the company name to Asset Entities Inc.

Reverse Stock Split

On June 27, 2024, the

Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Secretary of State of the State

of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares of Class A Common Stock, $ 0.0001

par value per share, and Class B Common Stock, $ 0.0001 par value per share.

The reverse stock split became effective on July 1, 2024.

Prior to the reverse

stock split, the Company was authorized to issue 200,000,000 shares of common stock, consisting of 10,000,000 shares of Class A Common

Stock and 190,000,000 shares of Class B Common Stock.

As a result of the reverse stock split, the Company will be authorized to issue

40,000,000 shares of common stock, consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

All share and per share

information in these financial statements retroactively reflect this reverse stock split.

Description of Business

Asset Entities is an Internet company providing

social media marketing, content delivery, and development and design services across Discord, TikTok, and other social media platforms.

Based on the rapid growth of our Discord servers and social media following, we have developed three categories of services.

provide subscription upgrades to premium content on our investment education and entertainment servers on Discord.

Second, we codevelop

and execute influencer social media and marketing campaigns for clients.

Third, we design, develop and manage Discord servers for clients

under our “AE.360.DDM” brand.

TO CONDENSED FINANCIAL STATEMENTS

of and for the nine months ended September 30, 2024

Organization, Description of Business and Liquidity

Entities Inc.

(“Asset Entities”, “we”, “us” or the “Company”), began operations as a

general partnership in August 2020 and formed Assets Entities Limited Liability Company in the state of California on October 20,

The interim financial statements reflect the operations of the Company from inception of the general partnership.

operations of the Company from inception to prior year-end is reflected in retained earnings.

On March 15, 2022, the Company filed

Articles of Merger to register and incorporate with the state of Nevada and changed the company name to Asset Entities

June 27, 2024, the Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the

Secretary of State of the State of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares

of Class A Common Stock, $ 0.0001 par value per share, and Class B Common Stock, $ 0.0001 par value per share.

The reverse stock

split became effective on July 1, 2024.

to the reverse stock split, the Company was authorized to issue 200,000,000 shares of common stock, consisting of 10,000,000 shares

of Class A Common Stock and 190,000,000 shares of Class B Common Stock.

As a result of the reverse stock split, the Company

will be authorized to issue 40,000,000 shares of common stock, consisting of 2,000,000 shares of Class A Common Stock

and 38,000,000 shares of Class B Common Stock.

share and per share information in these financial statements retroactively reflect this reverse stock split.

Entities is an Internet company providing social media marketing, content delivery, and development and design services across Discord,

TikTok, and other social media platforms.

Based on the rapid growth of our Discord servers and social media following, we have developed

three categories of services.

First, we provide subscription upgrades to premium content on our investment education and entertainment

servers on Discord.

Second, we codevelop and execute influencer social media and marketing campaigns for clients.

Third, we design, develop

and manage Discord servers for clients under our “AE.360.DDM” brand.

Our AE.360.DDM service was released in December 2021.

All of these services – our Discord

investment education and entertainment, social media and marketing, and AE.360.DDM services – are therefore based on our effective

use of Discord in combination with ongoing social media outreach on TikTok, Facebook, Twitter, Instagram, and YouTube.

The Company had an accumulated deficit of $ 8,671,756 as

of June 30, 2024, cash of $ 1,926,888 as of June 30, 2024, and a net loss of $ 3,113,441 for the six months ended June 30, 2024

On May 24, 2024, the Company entered into a securities purchase agreement with an investor for the issuance and sale of up to 330 shares

of the Company’s newly designated Series A Convertible Preferred Stock for maximum gross proceeds of $ 3,000,000 .

Based on the Company’s

existing cash resources and the cash expected to be received from these financings, management believes that the Company will have sufficient

funds to carry out the Company’s planned operations for at least the next 12 months from the issuance date of the accompanying

All of these services – our Discord investment education and entertainment, social media and marketing, and AE.360.DDM services

– are therefore based on our effective use of Discord in combination with ongoing social media outreach on TikTok, Facebook, Twitter,

Instagram, and YouTube.

Company had an accumulated deficit of $ 9,994,891 as of September 30, 2024, cash of $ 2,098,406 as of September 30, 2024, and

a net loss of $ 4,436,576 for the nine months ended September 30, 2024.

On May 24, 2024, the Company entered into a securities purchase

agreement with an investor for the issuance and sale of up to 330 shares of the Company’s newly designated Series A Convertible

Preferred Stock for maximum gross proceeds of $ 3,000,000 .

the nine months ended September 30, 2024, the Company issued 330 shares of Series A Convertible Preferred Stock and received proceeds

of $ 2,647,500 , net of discount.

Based on the Company’s existing cash resources, management believes that the Company will have

sufficient funds to carry out the Company’s planned operations for at least the next 12 months from the issuance date of the accompanying

interim financial statements.

Summary of Significant Accounting

Basis of Presentation

The Company prepares its financial statements

in accordance with rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) and generally accepted accounting

principles in the United States of America (“GAAP”).

The accompanying interim financial statements have been prepared in

accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X.

Accordingly, they do not include

all of the information and footnotes required by GAAP for complete financial statements.

In the Company’s opinion, all adjustments

(consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the

six months ended June 30, 2024, are not necessarily indicative of the results for the full year.

While management of the Company believes

that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction

with the audited financial statements and the footnotes thereto for the year ended December 31, 2023, contained in the Company’s

Form 10-K filed on April 2, 2024.

Use of Estimates

The preparation of interim financial statements

in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of expenses

during the reporting period.

Some of these judgments can be subjective and complex, and, consequently, actual results may differ from

these estimates.

Cash and Cash Equivalents

For purposes of balance sheet presentation and

reporting of cash flows, the Company considers all unrestricted demand deposits, money market funds and highly liquid debt instruments

with an original maturity of less than 90 days to be cash and cash equivalents.

The Company had no cash equivalents at June 30, 2024

and December 31, 2023.

Periodically, the Company may carry cash balances

at financial institutions more than the federally insured limit of $ 250,000 per institution.

The amount in excess of the FDIC

insurance as of June 30, 2024, was approximately $ 1.64 million.

The Company has not experienced losses on account balances and management

believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Property and equipment

Property and equipment are stated at cost less

accumulated depreciation and impairment loss, if any.

Property and equipment are depreciated at rates sufficient to write off their

costs less impairment and residual value, if any, over their estimated useful lives on a straight-line basis.

Summary of Significant Accounting Policies

of Presentation

Company prepares its financial statements in accordance with rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”)

and generally accepted accounting principles in the United States of America (“GAAP”).

The accompanying interim financial

statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the Company’s

opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

results for the nine months ended September 30, 2024, are not necessarily indicative of the results for the full year.

While management

of the Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should

be read in conjunction with the audited financial statements and the footnotes thereto for the year ended December 31, 2023, contained

in the Company’s Form 10-K filed on April 2, 2024.

preparation of interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial

statements and the reported amounts of expenses during the reporting period.

Some of these judgments can be subjective and complex, and,

consequently, actual results may differ from these estimates.

and Cash Equivalents

purposes of balance sheet presentation and reporting of cash flows, the Company considers all unrestricted demand deposits, money market

funds and highly liquid debt instruments with an original maturity of less than 90 days to be cash and cash equivalents.

had no cash equivalents at September 30, 2024 and December 31, 2023.

Periodically,

the Company may carry cash balances at financial institutions more than the federally insured limit of $ 250,000 per institution.

amount in excess of the FDIC insurance as of September 30, 2024, was approximately $ 1.7 million.

The Company has not experienced

losses on account balances and management believes, based upon the quality of the financial institutions, that the credit risk with regard

to these deposits is not significant.

and equipment

and equipment are stated at cost less accumulated depreciation and impairment loss, if any.

Property and equipment are depreciated

at rates sufficient to write off their costs less impairment and residual value, if any, over their estimated useful lives on a straight-line

Machinery and Equipment

Office Equipment and Fixtures

The Company did not have any Building, Machinery

and Equipment, and Vehicle as of June 30, 2024.

Maintenance and repairs are charged to expense

Company did not have any Building, Machinery and Equipment, and Vehicle as of September 30, 2024.

and repairs are charged to expense as incurred.

Improvements of a major nature are capitalized.

At the time of retirement or other disposition of property and equipment,

the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in the income.

The long-lived assets of the Company are reviewed

for impairment in accordance with ASC No.

360, “Property, Plant and Equipment” (“ASC No.

360”), whenever events

or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The recoverability of assets to be

held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated

by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying

amount of the assets exceeds the fair value of the assets.

Intangible Assets

Intangible assets acquired are recorded at fair

We test our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying

value of the assets may not be recoverable.

We test our indefinite-lived intangible assets for impairment annually

or whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

If the carrying value exceeds the fair value, we recognize an impairment in an amount equal to the excess, not to exceed the

carrying value.

Management uses considerable judgment to determine key assumptions, including projected revenue, royalty rates and

appropriate discount rates.

During the six months ended June 30, 2024 and 2023, there were no intangible asset impairment charges.

Finite-lived intangible assets are amortized

using the straight-line method over their estimated useful lives, which ranges from 5 to 15 years .

Our finite-lived

intangible assets include acquired franchise agreements, acquired customer relationships, acquired customer lists, and internally

developed software.

Our indefinite-lived intangible assets include acquired domain names, trade names, and purchased software.

Intangible assets internally developed are measured

We capitalize costs to develop or purchase computer software for internal use which are incurred during the application development

These costs include fees paid to third parties for development services and payroll costs for employees’ time

spent developing the software.

We expense costs incurred during the preliminary project stage and the post-implementation stage.

development costs are amortized on a straight-line basis over the estimated useful life of the software.

The capitalization and

ongoing assessment of recoverability of development costs requires considerable judgment by management with respect to certain external

factors, including, but not limited to, technological and economic feasibility, and estimated economic life.

Impairment of Long-lived Assets Other Than

Long-lived assets with finite lives, primarily

property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset may not be recoverable.

If the estimated cash flows from the use of the

asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down

to its fair value.

Fair Value Measurements

The Company uses a three-tier fair value

hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities

measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.

The hierarchy requires the Company

to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.

The three tiers

are defined as follows:

1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets

or liabilities in active markets;

2—Observable inputs other than quoted prices in active markets that are observable

either directly or indirectly in the marketplace for identical or similar assets and liabilities;

3—Unobservable inputs that are supported by little or no market data, which require

the Company to develop its own assumptions.

The Company’s financial instruments, including

cash, prepaid expense and contract liabilities, other current liabilities are carried at historical cost.

At June 30, 2024 and December

31, 2023, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

Advertising Expenses

The Company expenses advertising costs as they

Total advertising expenses were $ 284,886 and 170,371 for the six months ended June 30, 2024 and 2023, respectively,

and have been included as part of general and administrative expenses.

Research and Development

Research and development costs are charged to

expense as incurred.

At the time of retirement or other disposition

of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected

in the income.

long-lived assets of the Company are reviewed for impairment in accordance with ASC No.

360, “Property, Plant and Equipment”

360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted

cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

assets acquired are recorded at fair value.

We test our finite-lived intangible assets for impairment whenever events or changes in circumstances

indicate that the carrying value of the assets may not be recoverable.

We test our indefinite-lived intangible assets

for impairment annually or whenever events or changes in circumstances indicate that the carrying value of the assets may not be

If the carrying value exceeds the fair value, we recognize an impairment in an amount equal to the excess, not to

exceed the carrying value.

Management uses considerable judgment to determine key assumptions, including projected revenue, royalty

rates and appropriate discount rates.

During the nine months ended September 30, 2024 and 2023, there were no intangible asset

impairment charges.

intangible assets are amortized using the straight-line method over their estimated useful lives, which ranges from 5 to 15 years .

Our finite-lived intangible assets include acquired franchise agreements, acquired customer relationships, acquired customer lists,

and internally developed software.

Our indefinite-lived intangible assets include acquired domain names, trade names, and purchased

assets internally developed are measured at cost.

We capitalize costs to develop or purchase computer software for internal use which

are incurred during the application development stage.

These costs include fees paid to third parties for development services

and payroll costs for employees’ time spent developing the software.

We expense costs incurred during the preliminary project stage

and the post-implementation stage.

Capitalized development costs are amortized on a straight-line basis over the estimated

useful life of the software.

The capitalization and ongoing assessment of recoverability of development costs requires considerable

judgment by management with respect to certain external factors, including, but not limited to, technological and economic

feasibility, and estimated economic life.

of Long-lived Assets Other Than Goodwill

assets with finite lives, primarily property and equipment, intangible assets, and operating lease right-of-use assets are reviewed for

impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If the estimated

cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed

to be impaired and written down to its fair value.

Value Measurements

Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring

basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement.

The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining

The three tiers are defined as follows:

1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

2—Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace

for identical or similar assets and liabilities;

3—Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

Company’s financial instruments, including cash, prepaid expense and contract liabilities, other current liabilities are carried

at historical cost.

At September 30, 2024 and December 31, 2023, the carrying amounts of these instruments approximated their fair values

because of the short-term nature of these instruments.

Company expenses advertising costs as they incurred.

Total advertising expenses were $ 453,976 and $ 324,570 for the nine

months ended September 30, 2024 and 2023, respectively, and have been included as part of general and administrative expenses.

and Development

and development costs are charged to expense as incurred.

Accordingly, internal research and development costs are expensed as incurred.

Third-party research and development

costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable

The Company incurred research and development

expenses of $ 238,739 and $ 0 for the six months ended June 30, 2024 and 2023, respectively, and have been included as part

of contract labor.

Stock based compensation

Service-Based Awards

The Company records stock-based compensation

for awards granted to employees, non-employees, and to members of the Board for their services on the Board based on the grant date fair

value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period, which is generally one

to three years.

For restricted stock awards (“RSAs”)

issued under the Company’s stock-based compensation plans, the fair value of each grant is calculated based on the Company’s

stock price on the date of grant.

Share Repurchase

Share repurchases are open market purchases.

Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been

achieved as defined under the applicable agreement.

Company incurred research and development expenses of $ 336,719 and $ 0 for the nine months ended September 30, 2024 and

2023, respectively, and have been included as part of contract labor.

based compensation

Service-Based

Company records stock-based compensation for awards granted to employees, non-employees, and to members of the Board for their services

on the Board based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite

service period, which is generally one to three years.

restricted stock awards (“RSAs”) issued under the Company’s stock-based compensation plans, the fair value of each

grant is calculated based on the Company’s stock price on the date of grant.

repurchases are open market purchases.

Share repurchases are generally recorded on the settlement date, as treasury stock.

When shares are cancelled, the value of repurchased

shares is deducted from stockholders’ equity through common stock with the excess over par value recorded to accumulated deficit.

Revenue Recognition

The Company recognizes revenue utilizing the

following steps:

are cancelled, the value of repurchased shares is deducted from stockholders’ equity through common stock with the excess over

par value recorded to accumulated deficit.

Company recognizes revenue utilizing the following steps:

(i) Identify the contract, or contracts, with a customer;

(ii) Identify the performance obligations in the contract;

(ii) Identify the

performance obligations in the contract;

(iii) Determine the transaction price;

(iv) Allocate the transaction price to the performance obligations in the contract;

(v) Recognize

revenue when the Company satisfies a performance obligation.

(iv) Allocate the transaction price to the performance

obligations in the contract;

(v) Recognize revenue when the Company satisfies a performance obligation.

Subscriptions

Subscription revenue is related to a single performance

obligation that is recognized over time when earned.

Subscriptions are paid in advance and can be purchased on a monthly, quarterly,

or annual basis.

Any quarterly or annual subscription revenue is recognized as a contract liability recorded over the contracted service

Revenue related to marketing campaign contracts

with customers are normally of a short duration, typically less than two (2) weeks.

AE.360.DDM Contracts

Revenue related to AE.360.DDM contracts with

customers are normally of a short duration, typically less than one (1) week.

Contract Liabilities

Contract liabilities consist of quarterly and

annual subscription revenue that have not been recognized.

Revenue under these agreements is recognized over the related service period.

As of June 30, 2024 and December 31, 2023, total contract liabilities were $ 1,686 and $ 3,445 respectively.

Contract liabilities

are expected to be recognized as revenue over a period not to exceed twelve (12) months.

Changes in contract liabilities for the six months

ended June 30, 2024 are as follows:

revenue is related to a single performance obligation that is recognized over time when earned.

Subscriptions are paid in advance and

can be purchased on a monthly, quarterly, or annual basis.

Any quarterly or annual subscription revenue is recognized as a contract liability

recorded over the contracted service period.

related to marketing campaign contracts with customers are normally of a short duration, typically less than two (2) weeks.

related to AE.360.DDM contracts with customers are normally of a short duration, typically less than one (1) week.

liabilities consist of quarterly and annual subscription revenue that have not been recognized.

Revenue under these agreements is recognized

over the related service period.

As of September 30, 2024 and December 31, 2023, total contract liabilities were $ 610 and $ 3,445 respectively.

Contract liabilities are expected to be recognized as revenue over a period not to exceed twelve (12) months.

in contract liabilities for the nine months ended September 30, 2024 are as follows:

September 30,

Balance, December 31, 2023

1 unchanged sentence

Recognition of revenue

Balance, June 30, 2024

Earnings Per Share of Common Stock

The Company has adopted ASC Topic 260, “Earnings

per Share” which requires presentation of basic earnings per share on the face of the statements of operations for all

entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic earnings per share

In the accompanying interim financial statements, basic loss per share is computed by dividing net loss by the weighted

average number of shares of common stock outstanding during the year.

Diluted earnings per share is computed by dividing net income by

the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to

reflect the potential dilution that could occur from common stock issuable through contingent share arrangements, stock options and warrants

unless the result would be antidilutive.

The Company would account for the potential dilution from convertible securities using

the as-if converted method.

The Company accounts for warrants and options using the treasury stock method.

For the three months ended June 30, 2024, warrants

representing 71,002 shares of common stock equivalents were excluded from the computation from diluted net loss per share as the result

was anti-dilutive.

Related Parties

The Company follows ASC 850, “Related

Party Disclosures” , for the identification of related parties and disclosure of related party transactions and

Balance, September 30, 2024

Per Share of Common Stock

Company has adopted ASC Topic 260, “Earnings per Share” which requires presentation of basic earnings per

share on the face of the statements of operations for all entities with complex capital structures and requires a reconciliation of the

numerator and denominator of the basic earnings per share computation.

In the accompanying interim financial statements, basic loss per

share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year.

earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive

outstanding shares of common stock during the period to reflect the potential dilution that could occur from common stock issuable through

contingent share arrangements, stock options and warrants unless the result would be antidilutive.

The Company would account for

the potential dilution from convertible securities using the as-if converted method.

The Company accounts for warrants and options using

the treasury stock method.

the three months ended September 30, 2024, warrants representing 105,490 shares of common stock equivalents were excluded from

the computation from diluted net loss per share as the result was anti-dilutive.

Company follows ASC 850, “Related Party Disclosures” , for the identification of related parties and

disclosure of related party transactions and balances.

There were no related party transactions except management fees.

During the six months ended June 30, 2024 and 2023, the Company

paid management fees to their controlling members totaling $ 1,805,377 and $ 1,600,037 , respectively.

Recent Accounting Pronouncements

The Company has considered all other recently

issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its interim

financial statements.

During the nine

months ended September 30, 2024 and 2023, the Company paid management fees to their controlling members totaling $ 2,513,562 and $ 2,275,878 ,

respectively.

Accounting Pronouncements

Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will

have a material impact on its interim financial statements.

Property and Equipment

Property and equipment consisted of the following:

and equipment consisted of the following:

September 30,

Office equipment

Accumulated depreciation

During the six months ended June 30, 2024 and

2023, the Company recorded depreciation of $ 2,341 and $0 , respectively.

the nine months ended September 30, 2024 and 2023, the Company recorded depreciation of $ 3,614 and $ 223 , respectively.

Intangible Assets

Intangible assets consist of the following:

assets consist of the following:

September 30,

Purchased software

intangible asset is an indefinite life asset and not subject to amortization.

It is subject to impairment testing.

There is no impairment

of the intangible asset as of the interim financial statement date.

Stockholders’ Equity

Authorized Capital Stock

On March 9, 2022, the Company filed Articles

of Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares, consisting of 10,000,000 shares

of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares of Class B Common

stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred Stock, $ 0.0001 par

value (the “Preferred Stock”).

On June 27, 2024, the

Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Secretary of State of the State

of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares of class A common stock and

class B common stock.

As a result of the Reverse Stock Split, the Company will be authorized to issue 40,000,000 shares of common stock,

consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

Preferred Stock

The Company shall have the authority to issue

the shares of Preferred Stock in one or more series with such rights, preferences and designations as determined by the Board of Directors

of the Company.

Series A Convertible Preferred Stock

On May 24, 2024, the

Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with

the Secretary of State of the State of Nevada designating 660 shares of the Company’s Preferred Stock, $ 0.0001 par value per

share, as “Series A Convertible Preferred Stock,” and setting forth the voting and other powers, preferences and relative,

participating, optional or other rights of the Series A Preferred Stock.

Each share of Series A Preferred Stock has an initial stated

value (“Stated Value”) of $ 10,000 per share.

The Series A Preferred

Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company,

ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares of Series A Preferred Stock

consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series A Preferred Stock.

Holders of Series A

Preferred Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock or cash on the Stated Value at an

annual rate of 6 % (which will increase to 12 % if a Triggering Event (as defined in the Certificate of Designation) occurs.

will be payable upon conversion of the Series A Preferred Stock or upon any redemption.

Holders of Series A

Preferred Stock will be entitled to convert shares of Series A Preferred Stock into a number of shares of Class B Common Stock determined

by dividing the Stated Value (plus any accrued but unpaid dividends and other amounts due, unless paid by the Company in cash) by the

conversion price of the Series A Preferred Stock (the “Conversion Price”).

The initial Conversion Price is $ 0.75 , subject

to adjustment including adjustments due to full-ratchet anti-dilution provisions.

Holders may elect to convert shares of Series A Preferred

Stock to Class B Common Stock at an alternate Conversion Price equal to 85 % (or 70 % if the Company’s Class B Common Stock is suspended

from trading on or delisted from a principal trading market or upon occurrence of a Triggering Event) of the average lowest daily volume

weighed average price of the Class B Common Stock during the Alternate Conversion Measuring Period (as defined in the Certificate of

Designation).

Securities Purchase Agreement

On May 24, 2024, the Company entered into a securities

purchase agreement (the “Purchase Agreement”) with an investor (the “Investor”) for the issuance and sale of

up to 330 shares of the Company’s newly designated Series A Convertible Preferred Stock, $ 0.0001 par value per share (“Series

A Preferred Stock”), for maximum gross proceeds of $ 3,000,000 .

Pursuant to the Purchase Agreement, the Company is required to issue

and sell 165 shares of Series A Preferred Stock at each of two closings subject to the satisfaction of the terms and conditions for each

The first closing (the “First Closing”) occurred on May 24, 2024 for the issuance and sale of 165 shares of Series

A Preferred Stock for gross proceeds of $ 1,500,000 .

The second closing (the “Second Closing”), for the issuance and sale

of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 , will occur on the first business day on which the conditions

specified in the Purchase Agreement for the Second Closing are satisfied or waived, including the filing and effectiveness of the Registration

Statement and the effectiveness of the Stockholder Consent.

In addition, the Company issued a warrant to Boustead for the purchase of

30,800 shares of Class B Common Stock with an exercise price of $ 3.75 per share.

The warrant is exercisable for a period of five

years and contains cashless exercise provisions.

Capital Stock

March 9, 2022, the Company filed Articles of Incorporation with the state of Nevada to authorize the Company to issue 250,000,000 shares,

consisting of 10,000,000 shares of Class A Common Stock, $ 0.0001 par value per share (“Class A Common”), 190,000,000 shares

of Class B Common stock, $ 0.0001 par value per share (“Class B Common”), and 50,000,000 shares of Preferred

Stock, $ 0.0001 par value (the “Preferred Stock”).

June 27, 2024, the Company filed a Certificate of Change pursuant to Section 78.209 of the Nevada Revised Statutes with the Secretary

of State of the State of Nevada authorizing a 1-for-5 reverse stock split of the Company’s issued and outstanding shares of class

A common stock and class B common stock.

As a result of the Reverse Stock Split, the Company will be authorized to issue 40,000,000 shares

of common stock, consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

Company shall have the authority to issue the shares of Preferred Stock in one or more series with such rights, preferences and designations

as determined by the Board of Directors of the Company.

A Convertible Preferred Stock

May 24, 2024, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”)

with the Secretary of State of the State of Nevada designating 660 shares of the Company’s Preferred Stock, $ 0.0001 par

value per share, as “Series A Convertible Preferred Stock,” and setting forth the voting and other powers, preferences

and relative, participating, optional or other rights of the Series A Preferred Stock.

Each share of Series A Preferred Stock has an

initial stated value (“Stated Value”) of $ 10,000 per share.

Series A Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and

winding up of the Company, ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares

of Series A Preferred Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series

A Preferred Stock.

of Series A Preferred Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock or cash on the Stated

Value at an annual rate of 6 % (which will increase to 12 % if a Triggering Event (as defined in the Certificate of Designation)

Dividends will be payable upon conversion of the Series A Preferred Stock or upon any redemption.

of Series A Preferred Stock will be entitled to convert shares of Series A Preferred Stock into a number of shares of Class B Common

Stock determined by dividing the Stated Value (plus any accrued but unpaid dividends and other amounts due, unless paid by the Company

in cash) by the conversion price of the Series A Preferred Stock (the “Conversion Price”).

The initial Conversion Price is

$ 0.75 , subject to adjustment including adjustments due to full-ratchet anti-dilution provisions.

Holders may elect to convert shares

of Series A Preferred Stock to Class B Common Stock at an alternate Conversion Price equal to 85 % (or 70 % if the Company’s

Class B Common Stock is suspended from trading on or delisted from a principal trading market or upon occurrence of a Triggering Event)

of the average lowest daily volume weighed average price of the Class B Common Stock during the Alternate Conversion Measuring Period

(as defined in the Certificate of Designation).

September 4, 2024, the Company, filed an amendment (the “Second Amended Designation”) to the Certificate of Designation of

Series A Convertible Preferred Stock of the Company (as amended, the “Certificate of Designation”), which amended the original

Certificate of Designation, as amended by the Certificate of Amendment to Designation of Series A Convertible Preferred Stock of Asset

Entities Inc.

filed with the Secretary of State of the State of Nevada on June 14, 2024, by providing that amendments may be made to

the beneficial ownership limitation provisions of the Certificate of Designation.

The Second Amended Designation became effective immediately

after the filing of the Second Amended Designation, the Company filed an amendment (the “Third Amended Designation”) to the

Certificate of Designation to amend the conversion and beneficial ownership limitation provisions of the Certificate of Designation.

The conversion provisions were amended to provide that a holder of Series A Convertible Preferred Stock, $ 0.0001 par value per share

(the “Series A Preferred Stock”), is not prohibited from delivering a Conversion Notice (as defined by the Certificate of

Designation) while another Conversion Notice remains outstanding.

The beneficial ownership provisions were amended to provide that any

conversion of shares of Series A Preferred Stock that would result in the holder beneficially owning in excess of 4.99 % of the shares

of Class B Common Stock, $ 0.0001 par value per share (“Class B Common Stock”), will not be effected, and the shares of Class

B Common Stock that would cause such excess will be held in abeyance and not issued to the holder until the date the Company is notified

by the holder that its ownership is less than 4.99 %, at the applicable Conversion Price (as defined by the Certificate of Designation),

and subject to the holder’s compliance with other applicable procedural requirements for conversion.

The Third Amended Designation

became effective immediately upon filing.

Purchase Agreement

A Convertible Preferred Stock

May 24, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an investor (the “Investor”)

for the issuance and sale of up to 330 shares of the Company’s newly designated Series A Convertible Preferred Stock,

$ 0.0001 par value per share (“Series A Preferred Stock”), for maximum gross proceeds of $ 3,000,000 .

Pursuant to the

Purchase Agreement, the Company is required to issue and sell 165 shares of Series A Preferred Stock at each of two closings

subject to the satisfaction of the terms and conditions for each closing.

The first closing (the “First Closing”) occurred

on May 24, 2024 for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 .

closing (the “Second Closing”), for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds

of $ 1,500,000 , will occur on the first business day on which the conditions specified in the Purchase Agreement for the Second Closing

are satisfied or waived, including the filing and effectiveness of the Registration Statement and the effectiveness of the Stockholder

In addition, the Company issued a warrant to Boustead for the purchase of 30,800 shares of Class B Common Stock with

an exercise price of $ 3.75 per share.

The warrant is exercisable for a period of five years and contains cashless

exercise provisions.

The Company received $ 1,345,000 , net of offering cost of $ 155,000 .

Class A Common Stock

Each share of Class A Common Stock entitles the

holder to ten (10) votes, in person or proxy, on any matter on which an action of the stockholders of the Company is sought and is convertible

by the holder into one (1) share of Class B Common Stock.

As part of a share conversion in March 2022,

the Company converted the 97.56 % membership interest to 1,951,200 shares of Class A Common Stock of the Company.

has reflected this conversion for all periods presented.

The Company had 1,506,406 and 1,677,056 shares

of Class A Common Stock issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

Class B Common Stock

Each share of Class B Common Stock entitles the

holder to one (1) vote, in person or proxy, on any matter on which an action of the stockholders of the Company is sought.

The Company had 1,559,595 and 1,207,827 shares

of Class B Common Stock issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

Six months ended June 30, 2024

During the six months ended June 30, 2024, the

Company issued Class B common stock as follows:

Second Closing, for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 , occurred

on July 29, 2024, which was the first business day on which the conditions specified in the Purchase Agreement for the Second Closing

were satisfied or waived.

The Company received $ 1,302,500 , net of offering cost of $ 197,500 .

the date of the Second Closing, the Company was required to issue a warrant to Boustead Securities, LLC for the purchase of 30,800 shares

of Class B Common Stock, equal to 7 % of the number of shares of Class B Common Stock that may be issued upon conversion of the shares

of Series A Preferred Stock sold at the Second Closing at the initial Conversion Price of $ 3.75 per share, subject to the Exchange

Limitation before the effectiveness of the Stockholder Approval (the “Fourth Tail Warrant”).

The Fourth Tail Warrant has

an exercise price of $ 3.75 per share.

July 30, 2024, Boustead’s rights to the Fourth Tail Warrant were assigned to an assignee.

The Fourth Tail Warrant was consequently

cancelled and a new warrant was issued to the assignee.

the nine months ended September 30, 2024, the Company issued 330 shares of Series A Convertible Preferred Stock for $ 2,647,500 , net of

the nine months ended September 30, 2024, 49 shares of Series A Convertible Preferred Stock valued at $ 497,766 including divided of $ 7,766

into 412,947 shares of Class B Stock.

Company had 281 shares of Series A Convertible Preferred Stock issued and outstanding as of September 30, 2024.

September 20, 2024, the Company entered into a Waiver and Consent, dated as of September 20, 2024 (the “Ionic ATM Waiver”),

between the Company and Ionic Ventures, LLC (“Ionic”), the sole holder of the Company’s Series A Convertible Preferred

Stock, $ 0.0001 par value per share (“Series A Preferred Stock”).

Pursuant to the Waiver and Consent, Ionic waived any prohibition,

restriction or adverse adjustment that would otherwise apply to any action of the Company relating to an “at the market offering”

(as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”)), of equity securities

of up to $ 5 million (“Waived ATM”) under the Securities Purchase Agreement, dated as of May 24, 2024, between the Company

Pursuant to the Ionic ATM Waiver, regardless of the terms and conditions of the Ionic Purchase Agreement and the Series A

Certificate of Designation, the Company may at any time enter into any agreement relating to a Waived ATM, the filing of a prospectus

supplement to a prospectus contained in an effective registration statement that was filed under the Securities Act relating to a Waived

ATM, the announcement of a Waived ATM, the issuance, offer, sale, or grant of any shares of the Company’s Class B Common Stock,

$ 0.0001 par value per share (“Class B Common Stock”), relating to a Waived ATM, or the issuance, offer, sale, or grant of

any securities in connection with either the provision of goods or services or settlement of any obligations that may otherwise arise

with respect to a Waived ATM.

In addition, pursuant to the Ionic ATM Waiver, Ionic waived any adjustment to the applicable Conversion

Price (as defined in the Series A Certificate of Designation), which partly determines the number of shares of Class B Common Stock issuable

upon conversion of a share of Series A Preferred Stock, that would otherwise occur as a result of any Waived ATM under the terms of the

Series A Certificate of Designation.

September 26, 2024, the Company entered into a Limited Waiver and Consent, dated as of September 26, 2024 (the “Boustead ATM

Waiver”), between the Company and Boustead Securities, LLC.

Pursuant to the Boustead ATM Waiver, Boustead waived any condition

on, restriction on, compensation rights, or rights of first refusal that would be applicable under the letter agreement, dated November

29, 2021, between the Company and Boustead (the “Boustead Engagement Letter”) and the Underwriting Agreement, dated as of

February 2, 2023, between the Company and Boustead (as representative of the underwriters named therein) in relation to an “at

the market offering” (as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”))

of equity securities of up to $ 5 million (a “Boustead Waived ATM”).

Pursuant to the Boustead ATM Waiver, the Company may

at any time enter into any agreement relating to a Boustead Waived ATM, the filing of a prospectus supplement to a prospectus contained

in an effective registration statement that was filed under the Securities Act relating to a Boustead Waived ATM, the announcement of

a Boustead Waived ATM, the issuance, offer, sale, or grant of any shares of the Class B Common Stock relating to a Boustead Waived ATM,

or the issuance, offer, sale, or grant of any securities in connection with either the provision of goods or services or settlement of

any obligations that may otherwise arise with respect to a Boustead Waived ATM.

As consideration, the Boustead ATM Waiver provides that

the Company will promptly pay Boustead 3.0 % of the gross sales price of all shares of Class B Common Stock sold in connection with any

Boustead Waived ATM until the end of the applicability of the provisions of the right of first refusal provisions of the Boustead Engagement

A Common Stock

share of Class A Common Stock entitles the holder to ten (10) votes, in person or proxy, on any matter on which an action of

the stockholders of the Company is sought and is convertible by the holder into one (1) share of Class B Common Stock.

part of a share conversion in March 2022, the Company converted the 97.56 % membership interest to 1,951,200 shares of

Class A Common Stock of the Company.

The Company has reflected this conversion for all periods presented.

Company had 1,250,000 and 1,677,056 shares of Class A Common Stock issued and outstanding as of September 30, 2024

and December 31, 2023, respectively.

B Common Stock

share of Class B Common Stock entitles the holder to one (1) vote, in person or proxy, on any matter on which an action of

the stockholders of the Company is sought.

Company had 2,225,889 and 1,207,827 shares of Class B Common Stock issued as of September 30, 2024 and December 31,

2023, respectively.

months ended September 30, 2024

the nine months ended September 30, 2024, the Company issued Class B common stock as follows:

● 427,056 shares of Class A common stock were converted into 427,056 shares of Class B common stock.

2 unchanged sentences

● 5,000 shares of Class B common stock for purchase of intangible asset valued at $ 9,500 .

Treasury Stock

During the year ended December 31, 2023, the

Company repurchased 50,000 shares of Class B Common stock at $ 176,876 and recorded as treasury stock as of June 30, 2024

and December 31, 2023.

Triton Purchase Agreement

On June 30, 2023, the Company, entered into a

Closing Agreement (the “Closing Agreement”) with Triton.

Under the Closing Agreement, the Company agreed to sell to Triton

shares of class B common stock, $ 0.0001 par value per share, of the Company (the “Class B Common Stock”), having a total

value, as determined under the Closing Agreement, of $ 1,000,000 .

On August 1, 2023, the Company and Triton entered

into an Amended and Restated Closing Agreement (the “Amended and Restated Closing Agreement”).

Subject to the terms of the

Amended and Restated Closing Agreement, the Company may deliver a closing notice (the “Closing Notice”) and issue certain

securities to Triton at any time on or before April 30, 2024, pursuant to which Triton will be obligated to purchase such securities

of the Company with an aggregate value of $ 1,000,000 in the following manner.

Upon delivery of the Closing Notice, Triton must purchase

newly-issued shares of Class B Common Stock of the Company (the “Triton Shares”) in an amount equal to up to 9.99 % of

the outstanding shares of Class B Common Stock following such purchase, plus pre-funded warrants (the “Triton Pre-Funded Warrants”

and together with the Triton Shares, the “Triton Securities”) that may be exercised to purchase an amount of newly-issued

shares of Class B Common Stock (the “Triton Warrant Shares”), such that the aggregate price of the Triton Shares and the

Triton Pre-Funded Warrants together with the exercise price to be paid upon full exercise of the Triton Pre-Funded Warrants will equal

a total gross purchase price of $ 1,000,000 .

Upon the Company’s election to deliver the Closing Notice, the price of each of the

Triton Shares will be set at 85 % of the lowest daily volume-weighted average price of the Class B Common Stock during the five (5)

business days before and five business days after the date of the Closing Notice.

On March 27, 2024, the Company delivered a Closing

Notice to Triton (the “Second Closing Notice”) for the purchase of 124,318 shares of the Company’s Class

B Common Stock to Triton Funds LP, a Delaware limited partnership (“Triton”).

The price of the shares was required to be 85 %

of the lowest daily volume-weighted average price of the Class B Common Stock during the five business days prior to the closing of the

purchase of the shares (the “Triton Closing”), and the Triton Closing was required to occur within five business days after

● 368,947 shares of Class B common stock for conversion of Series A Convertible Preferred stock.

44,000 shares were not yet issued at September 30, 2024.

● 30,067 shares of Class B common stock for cancellation

● 71,008 shares of Class B common stock for reverse stock split adjustment valued.

the year ended December 31, 2023, the Company repurchased 50,000 shares of Class B Common stock at $ 176,876 and recorded

as treasury stock as of September 30, 2024 and December 31, 2023.

Purchase Agreement

June 30, 2023, the Company, entered into a Closing Agreement (the “Closing Agreement”) with Triton.

Under the Closing Agreement,

the Company agreed to sell to Triton shares of class B common stock, $ 0.0001 par value per share, of the Company (the “Class

B Common Stock”), having a total value, as determined under the Closing Agreement, of $ 1,000,000 .

August 1, 2023, the Company and Triton entered into an Amended and Restated Closing Agreement (the “Amended and Restated Closing

Subject to the terms of the Amended and Restated Closing Agreement, the Company may deliver a closing notice (the

“Closing Notice”) and issue certain securities to Triton at any time on or before April 30, 2024, pursuant to which Triton

will be obligated to purchase such securities of the Company with an aggregate value of $ 1,000,000 in the following manner.

delivery of the Closing Notice, Triton must purchase newly-issued shares of Class B Common Stock of the Company (the “Triton Shares”)

in an amount equal to up to 9.99 % of the outstanding shares of Class B Common Stock following such purchase, plus pre-funded warrants

(the “Triton Pre-Funded Warrants” and together with the Triton Shares, the “Triton Securities”) that may be exercised

to purchase an amount of newly-issued shares of Class B Common Stock (the “Triton Warrant Shares”), such that the aggregate

price of the Triton Shares and the Triton Pre-Funded Warrants together with the exercise price to be paid upon full exercise of the Triton

Pre-Funded Warrants will equal a total gross purchase price of $ 1,000,000 .

Upon the Company’s election to deliver the Closing Notice,

the price of each of the Triton Shares will be set at 85 % of the lowest daily volume-weighted average price of the Class B Common

Stock during the five (5) business days before and five business days after the date of the Closing Notice.

March 27, 2024, the Company delivered a Closing Notice to Triton (the “Second Closing Notice”) for the purchase of 124,318 shares

of the Company’s Class B Common Stock to Triton Funds LP, a Delaware limited partnership (“Triton”).

The price of the

shares was required to be 85 % of the lowest daily volume-weighted average price of the Class B Common Stock during the five business days prior

to the closing of the purchase of the shares (the “Triton Closing”), and the Triton Closing was required to occur within five business days after

the date that the Triton Shares were received by Triton, in accordance with the Amended and Restated Closing Agreement, dated as of August

6 unchanged sentences

of the Class B Common Stock during the five business days prior to the Triton Closing.

In connection with the Triton Closing, pursuant

to the Boustead Engagement Letter and the Underwriting Agreement, the Company paid Boustead, as placement agent compensation, a total

of $ 16,907 , equal to 7 % of the aggregate purchase price and a non-accountable expense allowance equal to 1 % of the aggregate purchase

price for the Triton Shares.

In addition, the Company issued a warrant to Boustead for the purchase of 8,702 shares of Class B Common

Stock, equal to 7 % of the number of the Triton Shares, with an exercise price of $ 1.70 per share, equal to the purchase price per share

of the Triton Shares (the “Tail Warrant”).

The Tail Warrant is exercisable for a period of five years and contains cashless

exercise provisions.

connection with the Triton Closing, pursuant to the Boustead Engagement Letter and the Underwriting Agreement, the Company paid Boustead,

as placement agent compensation, a total of $ 16,907 , equal to 7 % of the aggregate purchase price and a non-accountable expense allowance

equal to 1 % of the aggregate purchase price for the Triton Shares.

In addition, the Company issued a warrant to Boustead for the

purchase of 8,702 shares of Class B Common Stock, equal to 7 % of the number of the Triton Shares, with an exercise price

of $ 1.70 per share, equal to the purchase price per share of the Triton Shares (the “Tail Warrant”).

The Tail Warrant

is exercisable for a period of five years and contains cashless exercise provisions.

agreement of Class B Common Stock

September 27, 2024, the Company entered into a Sales Agreement between the Company and A.G.P./Alliance Global Partners (the “Sales

Pursuant to the prospectus supplement and accompanying base prospectus relating to the offering of the Shares (as defined

below), and under terms of the Sales Agreement and the prospectus supplement and the accompanying base prospectus, filed on September

27, 2024, the Company may, from time to time, in transactions that are deemed to be “at the market offerings” as defined

in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), issue and sell through or to the Sales Agent,

up to a maximum aggregate amount of $ 1,791,704 of shares of the Company’s Class B Common Stock, $ 0.0001 par value per share (the

Company will pay the Sales Agent a cash commission of 3.0 % of the gross sales price of the Shares sold by the Sales Agent pursuant to

the Sales Agreement.

Pursuant to the terms of the Sales Agreement, the Company also agreed to reimburse the Sales Agent for reasonable

fees and expenses, not to exceed $ 60,000 (including but not limited to the reasonable and documented fees and disbursements of its legal

counsel), and additional amounts for annual maintenance of the Sales Agreement (including but not limited to the reasonable and documented

fees and disbursements of its legal counsel) on a quarterly basis, not to exceed $ 5,000 per quarter.

Equity Incentive Plan

The maximum number of shares of Class B Common

Stock that may be issued pursuant to awards granted under the 2022 Plan is 550,000 shares.

maximum number of shares of Class B Common Stock that may be issued pursuant to awards granted under the 2022 Plan is 550,000 shares.

Awards that may be granted include:

(a) Incentive Stock Options, or ISO, (b) Non-statutory Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock, the Restricted

Stock Units, or RSUs, (f) Stock granted as a bonus or in lieu of another award, and (g) Performance Awards.

These awards offer us and

our shareholders the possibility of future value, depending on the long-term price appreciation of our Class B Common Stock and the award

holder’s continuing service with us.

The RSA shares to directors vest quarterly for one year from the date

of grantee’s appointment as a director.

The RSA shares to officers vest annually over three years from the grant date.

are measured at fair market value on the date of grant and stock-based compensation expense is recognized as the shares vest with a corresponding

offset credited to additional paid-in-capital.

For the six months ended June 30, 2024 and 2023, the Company recorded stock-based compensation

expense of $ 739,309 and $ 603,925 , respectively.

As of June 30, 2024, 204,316 RSA shares have vested.

As of June 30, 2024, there was $ 1,839,331 of

unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period

of 1.64 years.

A summary of activity during the six months ended

June 30, 2024, follows:

shares Weighted

Price Weighted

(a) Incentive Stock Options, or ISO, (b) Non-statutory Stock Options, (c) Stock Appreciation Rights,

(d) Restricted Stock, the Restricted Stock Units, or RSUs, (f) Stock granted as a bonus or in lieu of another award, and (g) Performance

These awards offer us and our shareholders the possibility of future value, depending on the long-term price appreciation of

our Class B Common Stock and the award holder’s continuing service with us.

RSA shares to directors vest quarterly for one year from the date of grantee’s appointment as a director.

The RSA shares to officers

vest annually over three years from the grant date.

RSA shares are measured at fair market value on the date of grant and stock-based

compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital.

months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense of $ 910,583 and $ 904,241 , respectively.

As of September 30, 2024, 204,766 RSA shares have vested.

of September 30, 2024, there was $ 1,302,748 of unrecognized stock-based compensation expense related to unvested RSUs, which is

expected to be recognized over a weighted-average period of 1.39 years.

summary of activity during the nine months ended September 30, 2024, follows:

Number of Weighted Average Weighted Average

shares Exercise Price Life (years)

Outstanding, December 31, 2023 35,188 $ 28.12 4.05

Granted 70,302 3.50 4.92

Expired - - -

Exercised - - -

Outstanding, June 30, 2024 71,002 $ 15.70 4.11

All the outstanding warrants are exercisable

as of June 30, 2024.

The intrinsic value of the warrants as of June 30, 2024, is $ 1,566 .

Outstanding, September 30, 2024 105,490 $ 11.71 4.17

the outstanding warrants are exercisable as of September 30, 2024.

The intrinsic value of the warrants as of September 30, 2024, is $ 0 .

Subsequent Events

Management evaluated

all events from the date of the balance sheet, which was June 30, 2024 through August 14, 2024 which was the date these financial statements

were available to be issue.

Based on our evaluation no material events have occurred that require disclosure other than as disclosed

The Second Closing,

for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $ 1,500,000 , occurred on July 29, 2024, which

was the first business day on which the conditions specified in the Purchase Agreement for the Second Closing were satisfied or waived.

On the date of the Second

Closing, the Company was required to issue a warrant to Boustead Securities, LLC for the purchase of 30,800 shares of Class B Common

Stock, equal to 7 % of the number of shares of Class B Common Stock that may be issued upon conversion of the shares of Series A Preferred

Stock sold at the Second Closing at the initial Conversion Price of $ 3.75 per share, subject to the Exchange Limitation before the effectiveness

of the Stockholder Approval (the “Fourth Tail Warrant”).

The Fourth Tail Warrant has an exercise price of $ 3.75 per share.

On July 30, 2024, Boustead’s

rights to the Fourth Tail Warrant were assigned to an assignee.

The Fourth Tail Warrant was consequently cancelled and a new warrant

was issued to the assignee.

evaluated all events from the date of the balance sheet, which was September 30, 2024 through November 14, 2024 which was the date these

financial statements were available to be issue.

Based on our evaluation no material events have occurred that require disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements